Zomato’s parent company, Eternal, has just approved a major stock option award for its employees. Under this move, eligible workers will receive a total of 7,418,741 stock options — together valued at about Rs 172 crore. The decision was made by the company’s Nomination and Remuneration Committee on April 1, and marks one of the biggest stock benefit rounds in recent times for Zomato and its parent.
In simple terms, the company is giving its employees the chance to own a portion of the business through shares. These stock options are designed to reward long‑term commitment, performance, and help retain top talent as the business grows.
Below we unpack what this stock option grant means, how it works, and why it matters — all in clear, human language.
Understanding the Stock Option Grant
What Exactly Was Approved?
On April 1, Eternal’s Nomination and Remuneration Committee approved the allocation of over 7.4 million stock options to employees. These options are part of three existing employee stock option plans (ESOPs):
- Foodie Bay Employee Stock Option Plan 2014
- Zomato Employee Stock Option Plan 2021
- Zomato Employee Stock Option Plan 2024
These plans are legal structures that allow companies to grant employees the option to buy company shares at a later date, usually at a price set when the option is issued.
How Many Options Were Granted?
Here’s a breakdown of the options by plan:
- 38 options under the ESOP 2014 plan
- 1,802,224 options under ESOP 2021
- 5,616,479 options under ESOP 2024
This adds up to 7,418,741 stock options granted.
What Does Each Option Represent?
Each of these options can be converted into one fully paid‑up equity share of the company. That means if an employee holds an option and exercises it, they will receive one share with a face value of Rs 1.
After accounting for certain corporate adjustments, the total number of equity shares covered by the grant is 7,673,303.
Why This Matters to Employees
A Reward for Hard Work
Granting stock options is one of the most popular ways startups and high‑growth companies reward employees. Unlike a cash bonus, which is received immediately, stock options offer the possibility of a bigger payout in the future — if the company’s value increases.
For employees, this means their reward is directly tied to the company’s long‑term success. As Zomato grows and the value of its shares rises, those options can become very valuable.
Retention and Motivation
Stock options are also a tool to keep employees engaged for the long haul. Since options typically vest over time (meaning employees earn them gradually over a period of years), they encourage people to stay with the company longer.
This latest round of stock options could help ensure that key talent stays on board as Zomato continues to expand its services and market reach.
Looking at the Stock Plans
ESOP 2014
This is the oldest of the three plans and has been in place for nearly a decade. However, only a small number of options — just 38 — were granted under this plan in the latest round.
ESOP 2021
The Zomato Employee Stock Option Plan of 2021 is a more recent program. It accounted for more than 1.8 million of the latest options. This plan likely includes employees who joined during the company’s rapid growth phase following its initial public offering and market expansion.
ESOP 2024
The largest share of the recent grant — over 5.6 million options — came from the newest plan, introduced in 2024. This shows the company is actively building long‑term incentives for its current workforce and future hires.
What This Means for Zomato’s Future
A Competitive Advantage in Hiring
In the competitive world of technology and food delivery platforms, offering strong employee incentives is crucial. Stock options help Zomato attract and retain skilled workers who might otherwise move to rival companies or startups.
Alignment with Growth Goals
By tying rewards to company performance, Zomato is aligning employee interests with its own growth targets. If the company performs well financially, the value of the shares will rise — benefiting both the company and the employees.
Market Confidence
Such a significant stock option allocation also signals confidence from Zomato’s leadership in its business strategy. It shows that the company is planning for sustained growth and is willing to share future success with the people who help drive it.
How Employees Benefit Over Time
Vesting Schedules
Stock options typically do not become immediately available to employees. Instead, they “vest” over a period of time — meaning employees must stay with the company for a certain number of years before they can fully claim their shares.
These schedules vary by company and plan, but they are designed to encourage loyalty and ongoing contribution.
Exercising Options
Once stock options vest, employees can choose to “exercise” them — meaning they buy the underlying shares at the strike price (a price fixed at the time the option was granted). If the market value of the shares is higher than the strike price, employees can sell them for a profit.
This is one of the main financial benefits of stock options.
A Win‑Win Strategy
Overall, this large stock option grant from Zomato’s parent company demonstrates a strategic approach to nurturing talent and incentivizing performance. It rewards employees for past effort while encouraging them to stay invested in the company’s future.
For Zomato, it strengthens its culture of ownership and partnership. For employees, it creates a tangible link between their work and potential financial upside.
This move is not just a financial decision — it’s a statement about how Zomato values its people and plans to grow together.
